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President Sends '06 Budget to Congress

Programs Are Cut, But War Costs Are Not Included

By Peter Baker

Washington Post Staff Writer
Tuesday, February 8, 2005; Page A01

President Bush sent Congress a $2.57 trillion federal budget yesterday that is designed to project U.S. power and priorities overseas while squeezing government programs at home but would not make a sizable dent in the nation's record deficit next year, despite politically painful cuts.

While pumping more money into the Pentagon and foreign aid programs, the budget for the 2006 fiscal year would slash funding for a broad array of other government services as part of the deepest domestic reductions proposed since the Reagan era. In the long term, the fiscal plan envisions holding non-security discretionary spending flat for the next five years to fulfill Bush's promise to cut the deficit in half by 2009.

Hundreds of people line up early at the Government Printing Office to receive a copy of President Bush's proposed 2006 budget.
(Melina Mara -- The Washington Post)

_____Budget Politics_____

 Audio: Post congressional reporter Mike Allen discusses how the president's budget is being received on Capitol Hill.

Yet, because of the cost of the continuing wars in Iraq and Afghanistan, documents released yesterday make it clear that the administration may make little if any progress in curbing the red ink in the short run. The budget projects the deficit falling from an all-time high of $427 billion this year to $390 billion next year, but does not count the warfare expenses it expects in 2006. If the administration continues to spend at current rates, it will need more than $37 billion for the conflicts in 2006, leaving the deficit undiminished.

Administration officials maintained they would still meet the president's deficit goal by 2009 with sharper reductions in spending in the next few years, particularly as some proposed policy restructuring begins to yield savings. Bush, who inherited budget surpluses when he took office four years ago, depicted the spending plan as "a lean budget" and pronounced himself "upbeat" that a skeptical Congress would follow his lead.

"It is a budget that sets priorities," the president told reporters after meeting with his second-term Cabinet for the first time. "Our priorities are winning the war on terror, protecting our homeland, growing our economy. It's a budget that focuses on results. Taxpayers in America don't want us spending their money on something that's not achieving results."

But as Bush targeted popular programs for farmers, low-income children and police departments, the reaction on Capitol Hill immediately signaled a tough slog for his budget. Democrats leapt to attack, and Republicans responded cautiously with an eye on their favorite programs facing the budget ax. Virtually no major congressional figure embraced the budget without reservation, and even some Republicans fretted because it did not include the transition costs envisioned by Bush's plans to restructure Social Security.

"The president's budget is a hoax on the American people," said House Minority Leader Nancy Pelosi (D-Calif.). "The two issues that dominated the president's State of the Union address -- Iraq and Social Security -- are nowhere to be found in this budget." The spending blueprint, she added, "is fiscally irresponsible, morally irresponsible and a failure of leadership."

Interest groups rushed out statements denouncing aspects of the budget. Families USA, a health care consumer group, said that "many seniors, children and the sickest people in Medicaid will be devastated." Gerald W. McEntee, president of the American Federation of State, County and Municipal Employees, said, "There is nothing moral about putting more children at risk for abuse and neglect." Joseph G. Estey, president of the International Association of Chiefs of Police, said Bush "talks about homeland security but then guts funding for the very programs that help secure our homeland."

OMB Estimates

Note:
Numbers beyond 2004 are estimates. Budget estimates after 2005 do not include any supplemental war spending.

Source: OMB
Republicans either stayed silent or produced mixed evaluations. In separate statements, House Speaker J. Dennis Hastert (Ill.), House Majority Whip Roy Blunt (Mo.) and House Budget Committee Chairman Jim Nussle (Iowa) all used the same language to describe Bush's plan as a "starting point."

Senate Budget Committee Chairman Judd Gregg (R-N.H.) praised Bush's focus on discipline and said he would follow "the concepts" of the budget proposal, while adding, "We don't have to follow those programs." Sen. Susan Collins (R-Maine), chairman of the Homeland Security and Governmental Affairs Committee, was more blunt, saying that when it comes to "first responders," the Bush budget "falls short."

The White House expressed confidence that Congress would fall in line at least in terms of the bottom line, much as it did last year. "Are we going to get everything we ask for?" asked Joshua B. Bolten, director of the Office of Management and Budget. "No. . . . But I think we will get a lot of them."

Relying on the nation's stronger economic performance, the Bush budget would increase overall spending by 3.6 percent in the fiscal year starting Oct. 1 and embody a strong commitment to security. An extra 4.8 percent would be devoted to the Defense Department for a cumulative 38.6 percent increase over the past five years, and the Department of Homeland Security would receive almost 7 percent more, much of it coming from a $3-per-flight tax increase on airline tickets. State Department and foreign aid spending would go up 15.7 percent.

To offset those increases, the rest of the discretionary budget would fall almost 1 percent, with programs for health, education, the environment, farming and housing taking the biggest hits. Nine of the 15 Cabinet departments would lose funding, including Housing and Urban Development (11.5 percent), Agriculture (9.6 percent), and Transportation (6.7 percent).

The Environmental Protection Agency would be cut 5.6 percent and the Centers for Disease Control and Prevention by 12.4 percent, and the White House said it would take a 1.7 percent reduction in its spending. Altogether, about 150 programs would be eliminated or drastically scaled back, one third of them education-related.